SINGAPORE/NEW YORK- Asian equity markets ground higher as investors tried to look past gathering Sino-US tension and renewed coronavirus lockdowns to upcoming company earnings, hoping that global stimulus efforts will yield upbeat outlooks.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6 percent and touched a 20-week high as Chinese stocks extended their extraordinary rally.
Japan’s Nikkei edged ahead by 0.2 percent.
The Chinese yuan rose to a four-month high of 6.9872 per dollar and the greenback sat near a one-month low against a basket of currencies.
China was hit first and so is emerging first from the COVID-19 pandemic. In addition, fiscal stimulus, heavy government borrowing driving up bond yields, and a state-media editorial extolling strong fundamentals have stoked euphoria.
“The yuan has a perfect combination for a currency – relatively tight monetary policy; yield spreads moving in favor of the currency and equity prices also rising more than most,” said Deutsche Bank’s chief international strategist, Alan Ruskin.
“Even before we think of COVID-19 virus divergence indicators, there are enough money and related financial indicators consistent with a dollar/yuan below 7,” he said.
China’s blue-chip index rose for an eighth straight session in early trade on Thursday, gaining 0.6 percent to touch a five-year high. The Shanghai Composite was up by the same margin and at its highest level since early 2018. – Reuters
